Florida Urges Dual Registration for RIAs Required to Switch

The Florida Office of Financial Regulation (OFR) issued a press release this week encouraging all federal covered investment advisers with less than $100 million under management to consider dually registering with OFR and the SEC, and to initiate OFR registration as soon as possible. Dual registration would allow the investment adviser to continue as a federal covered adviser while Florida reviews the firm’s application. Upon being approved by OFR, the firm can then withdraw its SEC registration after July 21, 2011.

Florida’s recommendation was prompted by the time it takes to renew and approve applications. Early application increases a firm’s chance of being approved prior to July 21.

In addition to the “national de minimis exemption,” found at 517.021(13)(b)(8), F.S., Florida also exempts “private advisers” with 15 or fewer clients pursuant to 517.021(13)(b)(7). This means that firms that do not hold themselves out to the general public and have fewer than fifteen clients within the last 12 months do not have to register, nor do firms without an office in Florida and fewer than six clients, even if the latter do hold themselves out to the public.

Prospective applicants are reminded of OFR’s requirement to submit financial statements, register a qualifying principal, and submit fingerprint cards. There is also a processing fee required to be paid for every person listed on Schedule A or B of the Form ADV. Florida registered firms must also comply with the state’s net capital and books and records requirements. Finally, some Investment Adviser Representative that may be exempt from Florida registration prior to July 21 may be required to register with OFR after that date.

The release also sets out Florida’s fee requirements of $200 for the firm application; $100 for each branch office; $50 for each associated person; and $43.25 for the fingerprint cards. The usual ADV processing procedures apply, meaning the firm and its Investment Adviser representatives should register via IARD and choose Florida registration. All fees will be paid out of the firm’s IARD account, so that should be adequately funded prior to registration.

The release can be found here.

Parker MacIntyre provides legal and compliance services to investment advisers, broker-dealers, registered representatives, hedge funds and issuers of securities, among others. Our regulatory practice group assists financial service providers with the complex issues that arise in the course of their businesses, including compliance with federal and state laws and rules.

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